This invention relates generally to merchandising systems and more particularly to systems for generating and redeeming product discount coupons.
Discount coupons have long been distributed by manufacturers to merchandise their products and by retail stores to attract consumers to their particular stores. Both coupon types are typically distributed on a large scale basis as free-standing inserts in newspapers and other forms of mass distribution. Such coupons are effective only if used by a sufficiently high percentage of consumers. Using this gage, free-standing inserts are not very effective. Their redemption rate is presently approximately 2.8 percent and going down. Accordingly, alternatives are sought to such mass marketing techniques. Coupons are collected at stores and credit is provided to the customer purchasing the corresponding product. The coupons are bundled and forwarded to a clearing house and then to a redemption center for sorting and counting. Reports are then forwarded to the manufacturers issuing the coupons in order to generate a credit to the stores redeeming the coupons. Another problem with coupons is a significant misredemption rate of between 20 and 30 percent as a result of misidentification and outright fraud. The misredemption problem is exacerbated by the enormous amount of time, usually a number of months, that it takes to reimburse the retail stores for the discount given the consumer.
A new form of merchandising has evolved and has come to be known as micromarketing. Micro marketing is the tailoring of a message to a particular consumer based upon unique characteristics of that consumer. In order to effect such micromarketing, it is necessary to identify particular characteristics, such as the shopping habits, of particular consumers. One technique for identifying such characteristics is to match particular consumers with their purchases. Large retailers install systems based upon electronic customer-cards, provided to customers who pass a credit screen, in order to allow that consumer to cash checks or to debit purchases against their bank accounts. The electronic customer-card is passed through a special code reading device at the point-of-sale terminal in order to capture a personal identification number (PIN). The point-of-sale terminal also includes a laser scanner which identifies standard uniform product code (UPC) bar codes, applied to all products, in order to enter purchases into the in-store system. Purchases are matched to the customer through the PIN number. Because the file of the customer identified with the PIN code contains information regarding the income, demographic data, and the like, for that customer, an impressive data base may be established relating consumer characteristics to purchasing habits.
The problem with such customer-card based systems are many. The system is intrusive of the consumers' privacy expectations and tends to collect more data than is necessary to target merchandising to that customer. Furthermore, the large mass of data in the system makes it difficult for an individual product manufacturer to identify the consuming habits of its customers and, even if such information may be obtained, there is no efficient mechanism for converting this information into enhanced product sales. Furthermore, such systems tend to discriminate against low income individuals, and minority groups, because the electronic customer-cards are given only to credit-worthy customers. Furthermore, the electronic customer-card must be scanned by a separate reader at the point-of-sale terminal, which requires special equipment and a separate step on behalf of the cashier.
Coupons are currently being encoded with bar codes, such as UPC codes, which are provided for the purpose of identifying the manufacturer and brand of the product being discounted, the family of goods to which the product belongs and the value of the discount. A UPC standard coupon code has been established for this purpose. Additionally, a UPC standard has been established for "in-store" use by individual retailers. Such "in-store" codes have digits available that could be used by the retailer to identify a set of coupon parameters, similar to the standard coupon code. Coupons encoded with the UPC bar code may be scanned by the same scanner at the point-of-sale terminal which scans the UPC bar code of individual products being purchased. In this manner, the point-of-sale terminal may verify that a product matching the coupon has been purchased and properly credit the coupon value against the total amount of the purchase.
Systems have been proposed that combine a consumer identification code, or PIN, with a manufacturers' coupon in order to determine that a particular consumer has purchased a particular product for marketing research purpose. One such system is described in U.S. Pat. No. 4,908,761 entitled SYSTEM FOR IDENTIFYING HEAVY PURCHASERS WHO REGULARLY USE MANUFACTURERS PURCHASE INCENTIVES AND PREDICTING CONSUMER PROMOTIONAL BEHAVIOR RESPONSE PATTERNS. Both the consumer I.D., or PIN, number and the coupon parameters may be applied on the coupon in some fashion. While such systems achieve the purpose of matching particular consumers with particular purchases, they have failed to provide a means for effectively applying this information to the merchandising of products. Furthermore, such systems have not gained acceptance because they require separate scanning of the consumer I.D. code and the coupon I.D. code, which is a procedure which must be carried on separately from the redemption of the coupon. Conventional point-of-sale laser scanners will read only one UPC bar code field. If a coupon is encoded with more than one field, the scanner will read only the first field encountered and ignore the rest. This has made point-of-sale scanning of coupons, bearing a customer I.D. code, impractical. An additional problem with scanning coupons bearing a consumer I.D. code is a result of the need for a Product Look-up (PLU) record of each unique code to be identified in the point-of-sale system. Because a coupon bearing a particular customer I.D. number is a different (PLU) from the precise same coupon bearing a different customer I.D. number, the system would require a prohibitively large number of records in order to accommodate both consumer I.D. numbers and coupon parameter numbers in a point-of-sale terminal redemption scheme.